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Friday, July 11, 2014

At
Semicon West 2014, Bob Johnson, VP Research, Gartner, presented the
Semiconductor Capital Spending Outlook at the SEMI/Gartner Market
Symposium on July 7.

First, a look at the semiconductor revenue
forecast: it is likely to grow at a 4.3 percent CAGR from 2013-2018.
Logic continues to dominate, but growth falters. As per the 2013-2018
CAGRs, logic will be growing 3.5 percent, memory at 4.5 percent, and
other at 6.3 percent.

As for the memory forecast, NAND should
surpass DRAM. At 2013-2018 CAGRs, DRAM should grow -1.1 percent, while
NAND should grow 10.8 percent. Smartphone, SSD and Ultramobile are the
applications driving growth through 2018. SSDs are powering the NAND
market.

Among ultramobiles, tablets should dominate through 2018.
They should also take share from PCs. Next, smartphones have been
dominating mobile phones.

Looking at the critical markets for
capital investment, smartphones are the largest growth segment, but have
been showing signs of saturation. The revenue growth could slow
dramatically by 2018. Ultramobiles have the highest overall CAGR, but at
the expense of PC market. Tablets are driving down semiconductor
content. Desktop and notebook PCs are a large, but declining market.
This also requires critical revenue to fund logic capex. Lastly, SSDs
are driving NAND Flash growth. The move to data centers is driving
sustainable growth.

In capital spending, memory is strong, but
logic is weak through 2018. The 2014 spending is up 7.1 percent, driven
by strong memory market. Strength in NAND spending will drive future
growth. Note that memory oversupply in 2016 can create next cycle. NAND
is the capex growth driver in memory spending.

The major
semiconductor markets, which justify investment in logic leading edge
capacity, are now running out of gas. Ultramobiles are cannibalizing
PCs, smartphones are saturating and both are moving to lower cost
alternatives. It is increasingly difficult to manufacture complex SoCs
successfully at the absolute leading edge. Moore’s Law is slowing down,
while costs are going up.

Breakthrough technologies
(i.e., EUV) are not ready when needed. Much of the intelligence of
future applications is moving to the cloud. The data centers' needs for
fast, low power storage solutions are creating sustainable growth for
NAND Flash.

The traditional two-year per node pace of Moore’s Law
will continue to slow down. Only a few high volume/high performance
applications will be able to justify the costs of 20nm and beyond.
Whether this will require new or upgraded capacity is uncertain. 28nm
will be a long lived node as mid-range mobility products demand higher
levels of performance. Finally, the cloud will continue to grow in size
and influence creating demand for new NAND Flash capacity and
technology.